Forgent Networks (d/b/a Asure Software) Letter to Stockholders

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Wed May 27, 2009 5:01pm EDT

  AUSTIN, TX, May 27 (MARKET WIRE) -- 
Asure Software (NASDAQ: ASUR)

    Open letter to shareholders

    You should have received a proxy from Asure Software asking for your vote
regarding taking the company private. To many of you, this idea may seem
alarming because it immediately calls into question how you will trade
this stock in the future once it is no longer listed on NASDAQ and does
not report as a public company. We understand those concerns because the
Board of Directors has wrestled with those same issues as both fellow
shareholders and concerned members of an independent board that is
entrusted with doing what is best for all of our shareholders.

    There has been a significant amount of communication to you that has been
offered by people and groups outside of the company expressing their
opinions and concern regarding the company and the go private transaction.
Much of this information is confused and misleading. The Board would like
you to have the facts because we know you want to be fully informed when
you cast your final vote regarding this very important issue.

     I would like to share some candid thoughts with you regarding how Asure's
Board and Management arrived at the plan to take the company private and
the vision we have for the company going forward.

    Companies become publicly traded when they have the size, growth and
profitability to create an attractive market in their shares. Asure has
none of those qualifications today because it is a "start over." The
current company is attempting to inherit the benefits of being publicly
traded by growing into the shell of a company that formerly existed but
had a much larger infrastructure. We have approached this assignment in
two ways: Cutting cost and growing revenue. The revenue growth has come
from small acquisitions that were affordable and organic growth in
attractive markets. The inherited cost structure has been grossly out of
proportion to the new software revenue even though the costs have been
reduced over 93% since the start. Our goal has been to reach cash flow
positive by spending only what is necessary to grow revenue.

    Today, if you look at just the software portion of the business, it is
near break even and growing which indicates that this portion of the P&L
is balanced. The overhead expenses, however, remain too high which means
we burn cash. We have continued to cut overhead spending but with the
slower revenue growth due to the economic downturn, profitability will be
seriously delayed unless we reduce overhead expenses dramatically.

    There are two major components of overhead that offer the relief we seek:
The cost associated with being publicly traded and our building lease. The
building lease is fifteen years with four remaining and we have explored
for years every legal method of extricating the company without result to
date. The cost associated with being publicly traded is a collection of
expenses related to government compliance, legal and accounting that
amount to more than $1 million a year.

    We have chosen to pay for top tier services because the Board believes
that it is in all shareholders' best interest to ensure the integrity of
financial and compliance reporting. However, it is difficult for a company
of our size to afford those public company expenses. While some would
argue that we could remain public and save expense by cutting the quality
of services and take more risk with compliance, the Board has always
placed a premium on the integrity of financial and compliance reporting
and believes that such risk is not in shareholders' best interest.

    Going private would eliminate some cost, such as Sarbanes-Oxley
compliance, completely and would considerably reduce the risk of
switching to lower cost services such as legal and accounting. The net
result would be a savings of about $250,000 per quarter which would
reduce the cash out flow significantly and accelerate the time to
profitability. Revenues are growing quarterly and we expect to reach
break even under these conditions by the end of 2009.

    If we are unsuccessful in taking the company private and reducing these
expenses, then the choices would include taking longer to reach
profitability or reducing cost in the core software business. The choice
to remove $250,000 per quarter from operations could significantly impair
the ability to grow revenue and to remain competitive. Said differently,
if we were unsuccessful in taking the company private, we would be faced
with incurring significant risk or cutting the core business to afford
infrastructure costs that frankly don't contribute to helping the company
achieve its revenue goals.

    These are difficult choices that the Board has carefully considered for
more than a year with the help of many outside professionals. After
careful consideration, the best choice seems clear: Go private, save
expenses, keep the business healthy and reach profitability.

    The Board cares about share liquidity -- yours and their own. They believe
that liquidity is already an issue today because the stock is so thinly
traded. If the company is delisted from NASDAQ, as it currently faces,
then not only will liquidity decline further on the Over the Counter
Bulletin Board but be burdened with public company expenses. While it is
possible to delay delisting by exercising a reverse stock split, history
indicates that the move can be temporary and share prices return to below
the minimum bid price unless accompanied by an event such as
profitability.

    The Board believes that a profitable, private software company that is
growing in a strong market, such as Work Force Management, will be an
attractive acquisition candidate in a few years that could provide an
attractive return to our shareholders. In the meantime, we intend for the
stock to be traded on the Over the Counter Market Pink Sheets, which
provides significant liquidity to over five thousand other companies
today. In fact, over $123 Billion traded on the Pink Sheets in 2008 which
is an 800% increase in volume since 2001.

    These are difficult circumstances that lead to difficult choices. On the
other hand, we have great opportunities ahead if we execute our business
plan. We have a growing software business; cash without the need to
borrow; no debt and an experienced team that is passionate about being
successful.

    Please give your full consideration to this proposal and vote FOR the
proposals on your proxy.

Sincerely,


Richard N. Snyder
Chairman and Chief Executive Officer

    




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